The Apple Macintosh revolutionized the entire computer industry by the year of 1984. Steve Jobs and his ingenious Macintosh team arranged for the computer to be used by the normal “person in the street” – and not only by experts.
The first Apple Macintosh (1984)
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“Insanely great” - Steve Jobs could hardly put into words his enthusiasm by the launch of the Macintosh. On the legendary annual general meeting of January 24th, 1984, in the Flint Center not far from the Apple Campus in Cupertino, the Apple co-founder initially quoted Bob Dylan’s “The Times They Are A-Changin’” in order to then polemicize against an imminent predominance of the young computer industry by IBM.
The early 1980s. 1981 - Apple II has become the world’s most popular computer, and Apple has grown to a 300 million dollar corporation, becoming the fastest growing company in American business history. With over fifty companies vying for a share, IBM enters the personal computer market in November of 1981, with the IBM PC.
1983. Apple and IBM emerge as the industry’s strongest competitors, with each selling approximately one billion dollars worth of personal computers in 1983. The shakeout is in full swing. The first major personal computer firm goes bankrupt, with others teetering on the brink. Total industry losses for 1983 overshadow even the combined profits of Apple and IBM.
It is now 1984. It appears that IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money. Dealers, after initially welcoming IBM with open arms, now fear an IBM dominated and controlled future and are turning back to Apple as the only force who can ensure their future freedom.
IBM wants it all, and is aiming its guns at its last obstacle to industry control, Apple. Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right?
The crowd, among them the complete Macintosh developer’s team, shouted back: “Nooooo!”
The introduction of the first Mac on January 24th, 1984; taken from the “Lost 1984 Videos”
There had been only two milestone products so far: the Apple II in 1977 and the IBM PC in 1981, Jobs continued. “Today (…) we are introducing the third industry milestone product, the Macintosh. Many of us have been working on Macintosh for over two years now and it has turned out insanely great.”
Taking a look at the history of the personal computer today, Steve Jobs was on the right track with his historical comparison. However, it would not be IBM that became the great dominator of the computer industry over the years, but rather, the alliance of Microsoft and Intel.
By means of the Macintosh, the Apple management planned to prevent the absolute predominance of IBM. Thereby, they all had underestimated Bill Gates and Microsoft.
Apple boss John Sculley’s marketing strategy for the launch of the Macintosh was obvious. The former Pepsi manager, who had been brought to Apple by Steve Jobs, intended to arrange a duel between IBM and Apple, black vs. white, with Apple playing the role of the underdog. Sculley wrote in his book Odyssey:
So we needed a campaign that would focus on a two-horse race to leverage off of Apple’s underdog status. Dozens of other computer companies were coming out with products and I was afraid we were going to get lost in the crowd. If we could create a two-horse race between us and IBM, we might be able to convince people that there are really only two computer companies competing in the marketplace. In any large consumer industry, few people remember the third- or fourth-largest competitor.
In the fight against competitors such as Atari, Commodore, Sinclair and Amstrad, the Apple strategy paid off well. But Sculley, as well as Steve Jobs, had completely underestimated that Microsoft, being an ally from the outset, would, with the aid of Apple, develop into a dominant power of the PC industry and even dwarf IBM.
Bill Gates and Paul Allen had founded Microsoft as a small software company in Albuquerque (New Mexico) in 1975 and developed the programming language BASIC for the legendary computer MITS Altair in collaboration with other co-workers. Due to fortunate circumstances, Microsoft landed the order from IBM to deliver not only BASIC, but also the operating system for the first IBM PC in 1980. In the negotiation phase, the then leading operating system manufacturer Digital Research (CP/M) did not want to engage in page-filling adhesion contracts from IBM – and thus lost this gigantic deal.
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Though Microsoft did not have any operating system at that time, this did not prevent Bill Gates and his companion Steve Ballmer from playing for high stakes while facing IBM. From their neighboring software shack Seattle Computers (in the mean time, Microsoft had moved to the northwest of the USA) they bought all rights for QDOS (Quick and Dirty Operating System) for no less than 50,000 dollars in July 1981 and renamed it as MS-DOS. Gates had been clever enough at that time not to have all rights to the system negotiated away by the IBM crew and was therefore able to win clone companies such as Compaq as customers later.
Microsoft then provided their BASIC for the Apple II as well. Therefore, Steve Jobs and Bill Gates constantly ran into each other at that time. “Even before we finished our work on the IBM PC, Steve Jobs came and talked about what he wanted to do, what he thought he could do, sort of a Lisa but cheaper. We said boy, we’d love to help out”, Gates remembers. “The Lisa had all its own applications, but of course they required a lot of memory, ah, and we thought we could do better, and so Steve signed a deal with us to actually provide bundled applications for the first Mac, and so we were big believers in the Mac and what Steve was doing there.”
Bill Gates praising the Apple Macintosh by its launch in January 1984
Apple urgently needed software for the Mac, as there did not yet exist any program for the new system except for their in-house products MacWrite and MacPaint. Gates promised to have the programs Chart and File written for the Mac in addition to the spreadsheet program Excel. Steve Jobs appreciated the risk Microsoft took, but was not content with the first results though. “Most people don’t remember, but until the Mac, Microsoft was not in the applications business… it was dominated by Lotus. And Microsoft took a big gamble to write for the Mac.”
Apple still could have coped well with having given Microsoft’s new application business a leg up. However, Bill Gates had tasted blood in the Macintosh project. Jeff Raikes, who was responsible for the Office business at Microsoft until early 2008, reviews: “And so we got started in early 1982 on our Macintosh software effort and I think at that point in time, you know, it really clicked with Bill that, you know, graphic user interface was going to be the way, the way of the future. But while Bill was having his own GUI revelation, Jobs believed that Apple’s true enemy was IBM.”
Quote of the movie: “Pirates of Silicon Valley” - Microsoft steals from Apple
However, it was not until November 1985 that Microsoft introduced the first version 1.01 of Windows, which was two years after Gates had announced Windows in his first Comdex keynote at the Fall 1983 Comdex in Las Vegas. The system was based on DOS and was incredibly slow, but it reminded one of the Macintosh GUI in some features. In order to prevent Apple from taking legal action, Gates put the screws on Apple boss Sculley. His message was: As soon as Apple sends out the lawyers, Microsoft will immediately stop the development of Word and Excel for the Mac. Since Apple was depending on the Microsoft applications, Sculley licensed some of the Mac technologies to Microsoft.
As Microsoft went public with the next large version leap of Windows 2.03 at the beginning of 1988, Sculley tried to pull the ripcord and sued Microsoft and Hewlett-Packard for copyright infringement on March 17, 1988. John Sculley had been in a difficult situation, particularly as he had engaged in vague formulations in the contract with Microsoft in 1985, which gave great leeway to Gates and his lot. Moreover, he knew that his chances to win an action against Microsoft had been, purely from a legal viewpoint, not particularly good: “The look and feel, which is how it looks, the experience of using it, was not patentable, but it was copyrightable, but there was no precedent law. This was going to be a precedent setting case.”
Parody of an advertising spot for Windows featuring Steve Ballmer
Bill Gates recalls also reluctant this time.: “But it was a period of five years where, Microsoft er, our whole strategy would have been ruined because Windows was very important to us. (…) We assumed that the lawyers, the judges would all come to the right conclusion which eventually they did.” Sculley: “And Apple lost. But in that period of about six years that this case was going on it may have lulled us into a bit of complacency thinking that we were going to be insulated, you know, from the Windows attack.”
The introduction of Windows 3.1 in 1992 brought Microsoft the breakthrough in the “GUI war.” The system lacked the elegance and usability of the Macintosh system 7.0, but Windows appeared good enough to most PC users. With the help of Windows 95, which had been introduced with gigantic effort on August 24, 1995, Microsoft caught up closer to the Mac and in some aspects even appeared more progressive than the Mac OS, which had become dated in the meantime.
Steve Jobs, who, as the head of NeXT, had observed the advance of Windows from a distance, did not have any kind words for Bill Gates at the launch of Windows 95:
The only problem with Microsoft is they just have no taste, they have absolutely no taste, and what that means is - I don’t mean that in a small way, I mean that in a big way. In the sense that they don’t think of original ideas and they don’t bring much culture into their product, and you say why is that important - well you know proportionally spaced fonts come from type setting and beautiful books, that’s where one gets the idea - if it weren’t for the Mac, they would never have that in their products and so I guess I am saddened, not by Microsoft’s success - I have no problem with their success, they’ve earned their success for the most part. I have a problem with the fact that they just make really third rate products.
It is claimed that Jobs has apologized to Bill Gates for this remark later.
Steve Jobs about Microsoft (1995)
The relationship between Apple and Microsoft – and thus also the relationship between Steve Jobs and Bill Gates – did not get back to normal before the summer of 1997, when Steve Jobs had returned to Apple and engaged in the support of Microsoft in order to make the troubled company profitable again.
Bill Gates on the video screen at the MacWorld Expo 1997 in Boston
Many faithful Apple fans still remember with horror the moment when Steve Jobs announced the former archrival very pragmatically as the knight in shining armor at the MacWorld Expo 1997 in Boston with Bill Gates appearing on an oversized video screen just like “Big Brother.” Introducing Gates, Jobs said: “”We have to let go of the notion that in order to for Apple to win, Microsoft has to lose. Relationships that are destructive don’t help anybody. The era of setting this up as a competition between Apple and Microsoft is over.”
Microsoft invested 150 million dollars in 150,000 Apple stocks and, according to certain rumors, paid further 100 million dollars for copyright infringement during the past few years. At the same time, Gates obliged himself to continue the development of the Internet Explorer and Microsoft Office for the Mac for the following five years. Gates drew hisses from the audience of Apple faithful. The crowd also groaned when Steve Jobs said Apple would make Microsoft’s Internet Explorer the default browser for viewing the World Wide Web on Macintosh computers. That development was a blow to Netscape Communications Corp., which made a more popular competing browser and lost later on in the famous “browser war” against Microsoft.
It is now 1984. It appears IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money. Dealers initially welcoming IBM with open arms now fear an IBM dominated and controlled future. They are increasing and desperately turning back to Apple as the only force that can ensure their future freedom. IBM wants it all and is aiming its guns on its last obstacle to industry control, Apple. Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right about 1984?
The only problem with Microsoft is they just have no taste, they have absolutely no taste, and what that means is - I don’t mean that in a small way I mean that in a big way. In the sense that they they don’t think of original ideas and they don’t bring much culture into their product ehm and you say why is that important - well you know proportionally spaced fonts come from type setting and beautiful books, that’s where one gets the idea - if it weren’t for the Mac they would never have that in their products and ehm so I guess I am saddened, not by Microsoft’s success - I have no problem with their success, they’ve earned their success for the most part. I have a problem with the fact that they just make really third rate products.
Steve Ballmer
I will admit quite frankly that I think Windows today is probably four years behind, three years behind where it would have been had we not danced with IBM for so long. Because the amount of split energy, split works, split IQ in the company really cost our end customer real innovation in our product line and so whenever I hear these criticisms which I gotta to say sting eh sometimes, I say to myself just you watch, just you watch Windows 95, Windows 9…there’s no lack of focus there hasn’t been here for the last three or four years since we didn’t have this big spot with IBM. Even in the operating systems here now, you’ll start to see clear, clear…and people will recognise clear leadership.
Steve Jobs
www.mac-history.de
